#29 Winter 2000
l MODERN EMINENT
l TAFOL FILES AMICUS CURIAE BRIEF IN
l PROPERTY RIGHTS LOSE IN THE TRIAL COURT---
l FREE SPEECH
2000 Page 1
MODERN EMINENT DOMAIN
By Larry Salzman
This article was written for The Ayn Rand Institute's op-ed program.
It appeared in numerous papers, including The Sacramento Bee and
The Las Vegas Review-Journal.
Amid cheers of a majority of voters, the sanction of its mayor
and city council, and the financial backing of leading local businessmen,
the city of San Diego is perpetrating a terrible injustice. The
victims are a small group of innocent individuals facing the likelihood
of being stripped of their homes and businesses.
is being enacted for the alleged "public use" of
developing a downtown ballpark. Recently, the San Diego City Council
voted to move ahead with the project and officials are now ordering
people from their homes. The land taken by the city will go to
some of San Diego's most politically connected, who will build
the ballpark and a 26-block "entertainment center" where
the residents' homes and livelihoods now stand.
San Diego joins a growing trend among U.S. cities using the power
of eminent domain---the government's ability to lawfully seize
property---to tyrannize politically weak individuals. In a recent
well-publicized case, for instance, Donald Trump conspired with
Atlantic City officials to level a block of family businesses so
that he would have more room next to his casino for a parking lot.
Just as the ballpark developers did in San Diego, Trump turned
to unscrupulous city officials to gain by force what he could not
get by private negotiation. Fortunately, these victims were aided
by the charity of aggressive lawyers who blocked Trump's gambit.
a violation of property rights, traditionally the eminent domain
power was limited to and employed for strictly
public purposes such as roads, utilities, and military use. Courts
did not allow government to take, for example, a corner mom-and
-pop gas station solely to turn it over to McDonalds for redevelopment.
In 1983, when the state of Hawaii took vast tracts of land from
a small minority of private owners and resold it to the "general
public," the U.S. Court of Appeals declared it "a naked
attempt" to take private property and correctly identified
it as "majoritarian tyranny." Unfortunately, in 1984,
emboldened mayors and city councilmen have seized property in
greater quantity for increasingly specious purposes.
In Texas, the homes of 117 residents were bulldozed to make room
for a shopping mall. In Detroit, hundreds of residents and businesspeople
lost their homes and businesses so
2000 Page 2
that GM could
build a new plant. And elsewhere in San Diego an auto repair
shop, hardware store, and carpet business were
forced to close so that a Price Club could claim their land.
the injustice, many victims are financially ruined. Although
the cities are
charged under the Constitution with providing "just
compensation" to eminent domain victims, they are not required
to offer fair-market value but a bureaucratically determined "fair
and reasonable" one. Knowing that they will rarely be second-guessed
by the court's new pacifist approach, the cities often make callous,
shamefully low offers---sometimes less than 10 percent of appraised
value, and the victims' lawyers, where the victims can afford lawyers,
can only counsel their clients to take whatever they can get.
overwhelming public outrage at such injustices? A broad acceptance
morality of altruism--the view that an
individual's moral worth derives solely from service to others.
Its corollary, applicable in this case, is that any individual
sacrifice or injustice wreaked by the city is inconsequential in
comparison to the alleged benefit of a "public use."
Ayn Rand was
right when she observed, "since there is no
such entity as 'the public,' since the public is merely a number
of individuals, the idea that 'the public interest', supersedes
private interests and rights can have but one meaning---that the
interests and rights of some individuals take precedence over the
interests and rights of others."
This is exactly what is happening in San Diego and other American
cities. The local government is forcing a politically weak minority
of citizens to sacrifice its rights to a well-connected few, in
the alleged favor of the majority.
This use of
eminent domain flatly contradicts the fundamental principles
of this country, which declare that all men are created
equal, that every man is an end in himself endowed with inalienable
rights, including property rights, that each man be accorded
protection by the law and that no man be deprived of due process
under the law.
We must choose
one set of principles or the other---the American tradition,
or arbitrary rule by official whim. They cannot coexist.
The present use of eminent domain is a menace that must be challenged
at every step and, for the sake of all our freedom, should be repealed
entirely. It may be too late for too many beleaguered San Diegans,
but your property could be next.
TAFOL FILES AMICUS CURIAE BRIEF IN
As you know
from the news, relatives of Elian Gonzalez, the six-year-old
whose mother and stepfather lost their lives fleeing
communism, filed a lawsuit to prevent the INS from returning him
to Cuba. The government was supported by two amicus curiae briefs
each of which ignored the kind of society that exists on Cuba.
They took the (implicit) position that a communist system presented
no threat to a six-year-old boy. In the words of one of them: "The
Cuban people eagerly await Elian's return and every indication
is that Elian will receive only the warmest of welcomes when he
an amicus curiae brief, written by Amy Peikoff with editing from
Steve Plafker, in support of the relatives. This brief
took the opposite view of the way a governmental system
2000 Page 3
of what political system to live under is not a matter of "subjective bias"
or "international politics." It
is not a decision "inappropriately laden with subjective
culturally-based value judgments." The commitment to liberty
is not an
"encumbrance" which renders one incapable of
acting as proxy "for the effective
real parties in interest." Rather,
it is a decision that follows logically upon a proper
of the rights and interests at stake.
Those who say that political opinion is irrelevant to this case
are trying to further
their own political opinion: that a free
country like the United States provides
no better way of life for
human beings than does a totalitarian dictatorship.
Good and bad
news alternate in the Elian Gonzalez case. The district court
ruled for the government; the case is now in the
Court of Appeals. Ms. Reno is trying to get Elian back to Cuba
before the Courts can decide the case. The Court of Appeals
a temporary restraining order against her. See the newspapers for
the latest information.
PROPERTY RIGHTS LOSE IN THE TRIAL COURT---AGAIN!
For several years, TAFOL has been supporting its former president,
Michael Mazzone, in his fight against Texas IOLTA. This program
requires that lawyers place certain of their clients' funds in
interest-bearing bank accounts and turn the interest over to a
state agency for use in providing legal services to low-income
persons. Michael, one of his clients, and the Washington Legal
Foundation sued the State of Texas in a federal district court
seeking to have IOLTA declared unconstitutional. They asserted
two bases: that it violated property rights under the Fifth Amendment1
and that it violated rights to free speech under the First. The
basis of the second claim was that the State, through the program,
was using clients' money to fund positions to which they were opposed.
District Court denied both claims. On the Fifth Amendment claim,
the clients had no "property interest" in
the interest generated by their deposits. It found that the First
Amendment claim was premised on the property right claim.
of Appeals reversed this ruling. Texas appealed to the United
Court which affirmed the Court of Appeals.2
It declared that the interest in question was protected by the
Fifth Amendment but did not actually decide that the program was
unconstitutional. Instead, it sent the case back to the trial court
to answer two questions: Was the interest being taken by the IOLTA
program and, if so, what was the amount of "just compensations"?
Because of the nature of this ruling, the Texas program continues
A trial was held in September, 1999 before the same judge who
had made the original decision. Plaintiffs produced evidence showing
that, by the use of a modern computer program, most clients can
earn interest or otherwise benefit from their principal on deposit,
no matter how small the amounts. Michael's client testified he
disagreed with certain statements made with use of the interest
generated by his money.
called five witnesses: A local lawyer who testified that it would
be difficult to earn interest for his clients on
the funds entrusted to him, a former Texas Supreme Court chief
2000 Page 4
testified about the reasons why Texas adopted IOLTA
originally, the dean of the Texas Tech Law School and former
of IOLTA who testified about the legal needs of the poor,
the general counsel of a the Texas Independent Bankers Association
about federal restrictions on interest bearing checking accounts,
and a lawyer from Colorado who has been active in IOLTA activities
for the American Bar Association.
January, the judge ruled in favor of the Defendants.3 On
the Fifth Amendment claim, the court concluded that, without
the IOLTA program, clients' principal could generate no interest;
therefore, the State took nothing. On the First Amendment claim,
the Court concluded that Michael's client had failed to establish
any connection between him and any views with which he disagreed;
the Court also concluded that the IOLTA program is germane to
an "otherwise lawful regulatory program and supports a substantial
public interest" and therefore the clients' compelled financial
support was not improper.
Soon after receipt of the court's ruling, the plaintiffs appealed.
The Court of Appeals is awaiting receipt of the record. As soon
as the record arrives, a brief schedule will be set, and the case
will proceed. TAFOL will probably file another amicus curiae brief.
This case was originally filed on February 7, 1994. After numerous
proceedings in the trial court, the Court of Appeals, and the Supreme
Court, the latter issued its opinion on June 15, 1998. The case
still appears far from a complete resolution. The wheels of justice
grind slowly and, in the absence of a proper philosophy, sometimes
Note and References:
1.The portion of the Fifth Amendment relevant to the case reads: "nor
shall private property be taken for public use without just
2. The citation
for the trial court opinion is 873 F. Supp. 1 (WD
Tex. 1995), for the Court of Appeals. 97 F. 3d 996 (5th Cir.
1996), and for the Supreme Court 524 U.S. 156 (1998).
3. 86 F. Supp. 2d 617
By James McCrory
In another erosion of the First Amendment, the United States Supreme
Court held, in Nixon v. Shrink Missouri Government PAC,1 a 6 to
3 decision, that campaign contribution limits were constitutional.
Under the Missouri statute at issue, no person may contribute
more than $1,0752 to any candidate for state auditor
and certain other statewide offices. Shrink Missouri Government
to make a larger contribution to Zev David Freedman, a candidate
for the 1998 Republican nomination for auditor.
In order that it be able to do so, the PAC and Freedman brought
suit in a
2000 Page 5
Court to enjoin enforcement of the statute. The District Court
ruled against them but was reversed by the
Court of Appeal. The Supreme Court
reinstated the District Court decision.
case on the subject is Buckley v. Valeo3 decided in 1976. In
the court found spending limits unconstitutional
but upheld contribution limits of $1000 per election. The justification
for the limitation was "the prevention of corruption and the
appearance of corruption." It "drew a line between expenditures
and contributions, treating expenditure restrictions as direct
restraints on speech which nonetheless suffered little direct effect
from contribution limits."4
The PAC and
Freedman unsuccessfully argued that Missouri should be required
the existence of corruption in the electoral
process there. Under current constitutional interpretation, "[A]
state statute is not void, however, for want of evidence."
Justice Thomas, joined by Justice Scalia, wrote a passionate dissenting
opinion. Justice Thomas would overrule Buckley v. Valeo. He noted
the Court ignores the way speech of all kinds is disseminated.
Justice Kennedy also dissented but was open to other new legislation
as possibly constitutional.5
To the majority,
the pragmatic goal of "avoiding the appearance
of corruption" is more important than the First Amendment.
One wonders if the limit of this line of non-thinking is that only
individuals speaking on soap boxes ultimately have protected speech.
does not "work" to protect our form of
government; what does work is the application of the principles
of, and adherence to, liberty. And tyranny cannot be limited to
one set of rights. Thus, the worst comment was in Justice Stevens'
concurring opinion: "Money is property, it is not speech."
The entire Court is far from understanding the cause of corruption
here. As long as the government has favors to distribute, men will
try to get them. In the absence of rational criteria to determine
who benefits, influence will be used.6 And of course, no such
rational criteria are possible. The solution, therefore, is to
government to its proper role: the protection of rights.7 In a
properly limited government, dishonest men could not purchase favors
from government, and honest men would not need to pay bribes to
prevent improper government interference.
Notes and References:
1. No.98-963, <http://supct.law.cornell.edu/supct/html/98-963.ZS.html>,
decided on January 24, 2000.
2. This was
the limitation in 1995. The statute has a clause that allows
the maximum allowable amount to increase with
3. 424 U.S. 1(1976)
otherwise stated, all quotations come from the Shrink case. All
citations are omitted.
5. In a follow-up
case last month, a district court in Missouri held
restrictions on the amount a political party may contribute to
candidates unconstitutional. Predictably, the Republicans
hailed the decision as a victory for free speech, and the
Democratic attorney general criticized it as a "dramatic step
backwards." See [sorry link no longer works].
6. "The Pull Peddlers" in
Ayn Rand, The Voice of Reason, Essays
in Objectivist Thought.
7. "The Nature of Government" in
The Virtue of Selfishness by
Ayn Rand; The Declaration of Independence.
Copyright © 2000
The Association for Objective Law. All rights reserved. The Association
for Objective Law is a Missouri non-profit
corporation whose purpose is to advance Objectivism, the philosophy
of Ayn Rand, as the basis of a proper legal system.